When choosing investment products, it is important to keep in mind that in most cases there are costs attached to every individual layer of the overall product.
I have made several references to the Matryoshka, or Russian nesting doll, in the past because I find it to be such a fitting analogy to describe investment products and the costs attached to them. As its name suggests, it is a set of hollow wooden dolls arranged from small to large, with each larger doll nesting a smaller one.
No different to these dolls, different investment products also fit into each other, and although their packaging may look very attractive, in most cases there are costs attached to each of those individual layers. In other words, the more “dolls”, the less your returns.
This is one of the reasons why you need to be sure that you have chosen the right product when the time comes. A Linked Investment Services Provider (LISP) functions a lot like the Matryoshka nesting dolls. It offers access to a range of investment products and funds kept under one roof.
Denne historien er fra 8 November 2018-utgaven av Finweek English.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra 8 November 2018-utgaven av Finweek English.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
THE HEALTH OF SA'S MEDICAL SCHEMES
As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.
The effect of Gilbertson's departure
With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.
Making money from music
Why investors are increasingly drawn to the music industry.
Conviction is key
Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.
The post-pandemic toolkit
How CFOs can use technology to support growth.
Big city living exodus
Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.
Big compact, big value
Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.
On barriers to entry
There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.
Fear and greed in one index
To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.
Africa's largest data centre facility coming soon
Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.
